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Moving one step closer to bringing 1.325 Bcf/d of gas fromWestern Canada to Chicago, Alliance Pipeline last week announcedthe start of construction with the clearing of 410 miles offorested rights-of-way for mainlines and laterals in northwesternAlberta and northeastern British Columbia. The entire system isexpected to be completed and in service by October, 2000. Alliancesaid it already has commitments from 37 shippers for 15-yearcontracts worth a total of $8.2 billion. Agreements have beenreached with 93% of landowners along its 2,320-mile route acrossCanada and the United States, while time to complete the NEBproceedings has been built into the construction schedule.

Thunder Creek Gas Services LLC, a joint venture of Devon EnergyCorp. and KN Energy, has begun construction of a 126-mile gasgathering system in the Powder River Basin of northeast Wyoming.The system is expected to be operational by fall at a total cost ofabout $100 million.

Cash prices hinted Thursday that they’re not ready to settleinto the same kind of stagnation period that characterized much ofFebruary’s activity. Riding the momentum of a rising Henry Hubfutures contract, stronger crude oil futures (back over $13/bbl)and snowy weather in various regions, nearly all points roseanywhere from 2 cents to a dime with most increases in the vicinityof a nickel.

Fresh after receiving a boost from a hefty storage withdrawalWednesday afternoon, natural gas futures continued higher yesterdayin yet another tumultuous trading session. And for the second dayin a row locals were seen as the catalyst, using buy stops toorchestrate a gap higher opening. But overhead resistance at $1.77held and the market was left to ebb and flow within the 4-centtrading range, which was set in the first hour of trading. TheApril contract finished up 3.9 cents to $1.762.

The fate of the Millennium, Independence, SupplyLink andMarketLink pipeline expansion projects, which together representabout 1.7 Bcf/d of new pipeline capacity directed at northeasternmarkets from the Midwest, have been scheduled for discussion onlyat FERC’s next regular meeting March 10. That move has sparked aconsiderable degree of speculation among FERC observers andpipeline representatives.

Moving one step closer to bringing 1.325 Bcf/d of gas fromWestern Canada to Chicago, Alliance Pipeline announced the start ofconstruction with the clearing of 410 miles of forestedrights-of-way for mainlines and laterals in northwestern Albertaand northeastern British Columbia. The entire system is expected tobe completed and in service by October, 2000. Alliance said italready has commitments from 37 shippers for 15-year contractsworth a total of $8.2 billion.

Burlington Resources (BR) announced that its plan for 80-acrein-fill drilling of the Mesaverde Formation in the San Juan Basinof New Mexico has been approved by the New Mexico Oil ConservationDivision. The 80-acre well spacing order could open up anadditional 7,000 drilling locations in the San Juan and be a majorfactor contributing to production growth in the basin over the nextfew years, according to basin analyst George Lippman, who hasstudied the San Juan for the last 30 years. To date, BR has drilled38 Mesaverde 80-acre in-fill wells and plans to drill 50 additionalwells in 1999.

Some traders were groaning with dismay Wednesday at the prospectof the March market being one of nearly all sideways pricemovement, much like the February one preceding it. All it takes isa look at the multitude of zeroes and ones in the change column ofDaily GPI’s price table today to understand where they might havegotten such an idea.

After apparently teasing volatility-loving traders Monday,natural gas futures have returned to the somewhat unspectaculartrading which marred the month of February by chopping lazilysideways for the past two days. Only subtle differences-Tuesday’slate decline vs. Wednesday’s late uptick-were seen asdistinguishing features in an otherwise featureless market. TheApril contract saw the largest gains, notching a 2.7-cent gain tofinish at $1.723 in light to moderate trading Wednesday.